Padmarajan Memorial Trust has been formed after the demise of Padmarajan by friends, relatives and the public. It is chiefly the outcome of the efforts of Babu Prasad, a relative. Babu Prasad, together with another relative Padmanabha Panicker, mooted the suggestion before Padmarajanís wife and brother and with their cooperation, a committee was formed under the guidance of M/s M. T. Vasudevan Nair, Adoor Gopalakrishnan, K. G. George and Sreekumaran Thampi, with Gandhimathi Balan, Soorya Krishnamurthy, Chandrahasan of the Kerala Travels and Padmadharan as its members. The Trust was launched with the funds collected from Padmarajan’s friends and fans.

It was decided by the committee to institute an award in the name of Padmarajan for the best Malayalam short story published every year in periodicals carrying a cash award of Rs. 10,000 and a memento and for the best script writer and best film director, a cash award of Rs.10, 000 and Rs.20, 000 respectively together with a memento for each. These awards are being presented every year before an invited audience at Thiruvananthapuram in collaboration with the Soorya Film Society. Moreover, every year on January 24, Padmarajanís death anniversary is being observed as a memorial day in the front yard of Njavarackal, the house of his birth. On the occasion of this two or three-day long function, there would be sessions devoted to the discussion of story, script and cinema in general and literary competitions for college students, seminars in which renowned literary figures use to participate and film screenings. Since 2004, a library was functioning in Njavarackal house as a memorial to Padmarajan. A new building has been completed for housing the library in the seven cents of land that Padmarajan owned. The building has been constructed with financial aid sanctioned from the MLA fund by Sri. M. M. Hassan. The library is functioning in new building since Jan 24, 2007. Every year a commemorative souvenir is being published on his death anniversary. The names and details of those who have been honoured with the award of the Padmarajan Memorial Trust for the last fifteen years are given below.